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Palantir Reports Revenue Growth of 47% for Full Year 2020, Expects Q1 2021 Revenue Growth of 45%

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Palantir Technologies Inc. (NYSE: PLTR):

Summary

  • $1.1 billion in revenue for full year 2020, up 47% year-over-year

  • $322 million in revenue for Q4 2020, up 40% year-over-year

  • New contracts in Q4 2020 include Rio Tinto, PG&E, bp, U.S. Army, U.S. Air Force, FDA, and NHS

  • Expects Q1 2021 revenue growth of 45% year-over-year

Full Year 2020 Financial Results

In 2020, we generated $1.1 billion in revenue, up 47% year-over-year.

Our average revenue per customer was $7.9 million, up 41% year-over-year. Our average revenue from our top 20 customers was $33.2 million, up 34% year-over-year.

The number of customers generating more than $1 million in annual revenue grew 32% year-over-year. The number of customers generating more than $5 million in annual revenue grew 54% year-over-year. The number of customers generating more than $10 million in annual revenue grew 50% year-over-year.

Q4 2020 Financial Results

In Q4 2020, we generated $322 million in revenue, up 40% year-over-year.

We incurred a loss from operations of $156.6 million, which includes $241.8 million in stock-based compensation and $18.9 million in related employer payroll taxes.

Our income from operations was $104.1 million, after adjusting for stock-based compensation and related employer payroll taxes.

In Q4 2020, we signed 21 contracts each worth $5 million or more in total contract value, including 12 contracts each worth $10 million or more in total contract value.

Outlook

For full year 2021, we continue to expect:

  • Year-over-year revenue growth of greater than 30%.

For Q1 2021, we expect:

  • Year-over-year revenue growth of 45%.

  • Adjusted operating margin of 23%.

Earnings Webcast

A public webcast will be held at 6:00 a.m. MT / 8:00 a.m. ET today to discuss the results for our fourth quarter and fiscal year ended December 31, 2020 and financial outlook. The live public call can be accessed by registering online at https://event.on24.com/wcc/r/2947836/5C123DA27C8C4F9CBFBC27AC3FEABE81. Following the call, a replay will be available at (888) 869-1189 or (706) 643-5902 until midnight (ET) on February 23, 2021.

A slide presentation including supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures will be available through Palantir’s Investor Relations website at https://investors.palantir.com.

Non-GAAP Financial Measures

This press release and the accompanying tables contain the non-GAAP financial measures income (loss) from operations excluding stock-based compensation, related employer payroll taxes, and non-recurring direct listing charges (also referred to as "adjusted income (loss) from operations") and adjusted operating margin.

We believe these non-GAAP financial measures help us evaluate our business, identify trends affecting Palantir’s business, formulate business plans and financial projections, and make strategic decisions. We exclude stock-based compensation, which is a non-cash expense, from these non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance and provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. Additionally, we exclude expenses primarily related to the direct listing, as they are a one-time nonrecurring charge, and employer payroll taxes related to stock-based compensation, as it is difficult to predict and outside of Palantir’s control. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations, as they do not include the impact of certain expenses that are reflected in our consolidated statements of operations. Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.

A reconciliation table of the most comparable GAAP financial measure to each non-GAAP financial measure used in this press release is included at the end of this release. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, reconciling items that may be incurred in the future such as stock-based compensation, and related employer payroll taxes, the effect of which may be significant.

Additional Definitions

For the purpose of this press release, total contract value presumes the exercise of all contract options and no termination of contracts; however, the majority of our contracts are subject to termination for convenience provisions and there can be no guarantee that contracts are not terminated or that contract options will be exercised.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, product development, expected benefits of and applications for our software platforms, business strategy and plans (including strategy and plans relating to our sales force and partnerships), market trends and market size, opportunities (including growth opportunities), and positioning. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as "guidance," "expect," "anticipate," "should," "believe," "hope," "target," "project," "plan," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," "shall," and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the "SEC"), including in our quarterly report on Form 10-Q for the quarter ended September 30, 2020 and other filings and reports that we may file from time to time with the SEC, including our annual report on Form 10-K for the fiscal year ended December 31, 2020. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our cash and cash equivalents to meet our liquidity needs; the demand for our platforms in general; our ability to increase our number of new customers and revenue generated from customers; our ability to realize some or all of the total contract value of customer contracts as revenue, including any contractual options available to customers or contractual periods that are subject to termination for convenience provisions; our long and unpredictable sales cycle; our ability to retain and expand our customer base; the fluctuation of our results of operations and our key business measures on a quarterly basis in future periods; the seasonality of our business; the complexity and lengthy implementation process for our platforms; our ability to successfully develop and deploy new technologies to address the needs of our customers; our ability to make our platforms easier to install and consume; our ability to maintain and enhance our brand and reputation; news or social media coverage about us, including but not limited to coverage that presents, or relies on, inaccurate, misleading, incomplete, or otherwise damaging information; and any breach or access to customer or third-party data.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Past performance is not necessarily indicative of future results.

Available Information

Palantir uses its Investor Relations website at https://investors.palantir.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Palantir’s Investor Relations website, in addition to following press releases, SEC filings, public conference calls, and webcasts.

About Palantir Technologies Inc.

Palantir Technologies Inc. builds and deploys operating systems for the modern enterprise. Additional information is available at https://www.palantir.com.

Palantir Technologies Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(unaudited)

Three Months Ended December 31,

Years Ended December 31,

2020

2019

2020

2019

Revenue

$

322,091

$

229,358

$

1,092,673

$

742,555

Cost of revenue(1)

70,503

75,902

352,547

242,373

Gross profit

251,588

153,456

740,126

500,182

Operating expenses:

Sales and marketing(1)

147,619

112,865

683,701

450,120

Research and development(1)

94,130

75,835

560,660

305,563

General and administrative(1)

166,411

112,207

669,444

320,943

Total operating expenses

408,160

300,907

1,913,805

1,076,626

Loss from operations

(156,572

)

(147,451

)

(1,173,679

)

(576,444

)

Interest income

368

2,137

4,680

15,090

Interest expense

(1,814

)

(2,666

)

(14,139

)

(3,061

)

Change in fair value of warrants

(2,746

)

811

(3

)

Other income (expense), net

2,082

(4,711

)

3,300

(2,853

)

Loss before provision (benefit) for income taxes

(155,936

)

(155,437

)

(1,179,027

)

(567,271

)

Provision (benefit) for income taxes

(7,593

)

3,890

(12,636

)

12,375

Net loss

$

(148,343

)

$

(159,327

)

$

(1,166,391

)

$

(579,646

)

Net loss per share attributable to common stockholders, basic

$

(0.08

)

$

(0.29

)

$

(1.19

)

$

(1.02

)

Net loss per share attributable to common stockholders, diluted

$

(0.08

)

$

(0.29

)

$

(1.20

)

$

(1.02

)

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, basic

1,763,513,922

584,722,735

977,721,736

576,958,560

Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, diluted

1,763,513,922

584,722,735

979,330,067

576,958,560

——————

(1) Includes stock-based compensation expense as follows (in thousands):

Three Months Ended December 31,

Years Ended December 31,

2020

2019

2020

2019

Cost of revenue

$

19,342

$

11,384

$

139,627

$

27,904

Sales and marketing

75,852

22,973

398,205

79,215

Research and development

47,365

18,796

357,063

67,933

General and administrative

99,229

24,167

375,807

66,918

Total stock-based compensation expense

$

241,788

$

77,320

$

1,270,702

$

241,970

Palantir Technologies Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

As of December 31,

2020

2019

Assets

Current assets:

Cash and cash equivalents

$

2,011,323

$

1,079,154

Restricted cash

37,285

52,099

Accounts receivable

156,932

50,315

Prepaid expenses and other current assets

51,889

32,585

Total current assets

2,257,429

1,214,153

Property and equipment, net

29,541

31,589

Restricted cash, noncurrent

79,538

270,709

Operating lease right-of-use assets

217,075

Other assets

106,921

77,574

Total assets

$

2,690,504

$

1,594,025

Liabilities, Redeemable Convertible and Convertible Preferred Stock, and Stockholders’ Equity (Deficit)

Current liabilities:

Accounts payable

$

16,358

$

51,735

Accrued liabilities

158,546

126,620

Deferred revenue

189,520

186,105

Customer deposits

210,320

364,138

Operating lease liabilities

29,079

Total current liabilities

603,823

728,598

Deferred revenue, noncurrent

50,525

77,030

Customer deposits, noncurrent

81,513

167,538

Debt, noncurrent, net

197,977

396,065

Operating lease liabilities, noncurrent

229,800

Other noncurrent liabilities

4,316

78,205

Total liabilities

1,167,954

1,447,436

Redeemable convertible preferred stock

33,569

Convertible preferred stock

2,093,662

Stockholders’ equity (deficit):

Common stock

1,792

588

Additional paid-in capital

6,488,857

1,857,331

Treasury stock

(38,895)

Accumulated other comprehensive loss

(2,745)

(703)

Accumulated deficit

(4,965,354)

(3,798,963)

Total stockholders’ equity (deficit)

1,522,550

(1,980,642)

Total liabilities, redeemable convertible and convertible preferred stock, and stockholders’ equity (deficit)

$

2,690,504

$

1,594,025

Palantir Technologies Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Years Ended December 31,

2020

2019

Operating activities

Net loss

$

(1,166,391

)

$

(579,646

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

13,871

12,255

Stock-based compensation

1,270,702

241,970

Change in fair value of warrants

(811

)

3

Impairment of assets

674

23,407

Non-cash operating lease expense

35,049

Other operating activities

4,417

2,769

Changes in operating assets and liabilities:

Accounts receivable

(108,476

)

(23,905

)

Prepaid expenses and other current assets

(18,565

)

18,806

Other assets

(28,990

)

(29,447

)

Accounts payable

(34,681

)

23,424

Accrued liabilities

38,505

3,733

Deferred revenue, current and noncurrent

(30,905

)

(134,396

)

Customer deposits, current and noncurrent

(230,873

)

279,226

Operating lease liabilities, current and noncurrent

(43,639

)

Deferred rent

(3,414

)

Other noncurrent liabilities

3,505

Net cash used in operating activities

(296,608

)

(165,215

)

Investing activities

Purchases of property and equipment

(12,236

)

(13,096

)

Proceeds from the sale of assets held for sale

250

Purchase of equity method investment

(2,934

)

(25,868

)

Return of capital from equity method investment

17,000

Net cash used in investing activities

(14,920

)

(21,964

)

Financing activities

Proceeds from the issuance of common stock, net of issuance costs

942,529

100,000

Proceeds from issuance of debt, net of issuance costs

199,369

544,413

Principal payments on borrowings

(400,000

)

(150,000

)

Proceeds from the exercise of common stock options

298,829

16,897

Repurchase of common stock

(3,777

)

(11,202

)

Proceeds from the sale of redeemable convertible preferred stock

7,500

Redemption of redeemable convertible preferred stock

(168,000

)

Repurchase of convertible preferred stock

(13,873

)

Other financing activities

(497

)

(1,202

)

Net cash provided by financing activities

1,036,453

324,533

Effect of foreign exchange on cash, cash equivalents, and restricted cash

1,259

(2,227

)

Net increase in cash, cash equivalents, and restricted cash

726,184

135,127

Cash, cash equivalents, and restricted cash - beginning of period

1,401,962

1,266,835

Cash, cash equivalents, and restricted cash - end of period

$

2,128,146

$

1,401,962

Palantir Technologies Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except percentages)

(unaudited)

Non-GAAP Reconciliation

Income (Loss) from Operations, Excluding Stock-Based Compensation, Related Employer Payroll Taxes, and Non-Recurring Direct Listing Charges ("Adjusted Income (Loss) from Operations")

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2020

2019

2020

2019

Loss from operations

$

(156,572

)

$

(147,451

)

$

(1,173,679

)

$

(576,444

)

Add: stock-based compensation

241,788

77,320

1,270,702

241,970

Add: employer payroll taxes related to stock-based compensation (1)

18,933

39,105

Add: non-recurring direct listing charges (1)

53,737

Income (loss) from operations, excluding stock-based compensation, related employer payroll taxes, and non-recurring direct listing charges

$

104,149

$

(70,131

)

$

189,865

$

(334,474

)

Adjusted operating margin

32

%

(31

)%

17

%

(45

)%

——————

(1) Related employer payroll taxes and non-recurring direct listing charges were immaterial and as such were excluded in periods prior to and after Q3 2020.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210216005391/en/

Contacts

Investor Relations
Rodney Nelson
investors@palantir.com

Media
Lisa Gordon
media@palantir.com